"How Tariffs Work and Why They're Shaking the Market" & "Zero Stocks"
 

No matter how we are perceiving our current economic times, we might be starting to feel like we are on information-overload.

But here's more: I listen to podcasts, while I am doing other things, like chores, around the house. In the past few days, I ran across two financial interviews that I found particularly interesting. Here we go.....

April 4: On WealthTrack, Consuelo Mack interviewed Robert Kessler who has been in the world of finance for a long time. The title of this week's interview is "Zero Stocks."

While all around us, we are hearing things like, "Stay the course," and "The market goes up and the market goes down. This is normal," it is interesting to hear a different point of view on that. Kessler is all out. He refers to Warren Buffett now sitting on $325 Billion in sideline cash, waiting to buy value.

Consuelo brings up the standard routine about market timing, but Kessler does not really agree. At the end of the interview, my takeaway is that Kessler is retirement age and he simply does not think we retirees have time to wait for all this dust to settle.......

If you want to hear everything Kessler has to say, go to wealthtrack.com and find "Zero Stocks" -- the recent interview.

April 10: The other podcast I heard this week was on Taylor Schulte's Stay Wealthy Retirement Show. That was the one titled "How Tariffs Actually Work." Schulte interviewed yet another expert, Cullen Roche. Unlike some other financial podcasts, this one is well done. (Too many financial podcasters or television people can get downright annoying because they try to do comedy routines or are way too into banter or talk over top of the person they are talking to.)

This interview though was professionally done and informative and did not try to be esoteric. If that sounds good to you, just give the title a google and you will find it.

(This "living in interesting times" sure is getting old -- but so are we. :ohdear:)

Boomer

That's all well and fine, but my tendency is to listen to my senior VP of wealth management at Merrill Lynch and not the "talking heads" on TV and the internet

Chinese Crack
 

The intent of all these tariffs were to give governments advantages in trade. The Chinese crack of televisions, phones and chips seemed to be painless at first, but now we all will have to go through the withdrawals caused by those worms and parasites that really feasted on all of us for years. Thankfully we have the guts to know we need to go through withdrawal pains from the crack of other countries and get it done before going too far where it wouldn’t be survivable. A no tariff solution is the only solution.

If you want investment advice, buy American made stocks, nothing else is going to be happening’

PS. Not to freak anyone out, but your Alexa, televisions and iPhones were all made in China. Hmm….I know they all listen…I wonder what information they hear, store etc all while made in China? Is it possible someone inserted a little tweak, collecting data and saving it for future use? Nah

Reciprocal tariffs have just been removed from computers, smartphones and other electronic devices such as flat panel TVs. I guess big business lobbying and pay to play has been highly successful.

I handle my own investment management. No complaints. Life is good.

Wealthtrack is a good show which I DVR but have not viewed for a while. At least some of the interviewees such as Charles Royce and Bill Miller are with outfits that sponsor the show. If I recall correctly some time ago Bill got into bitcoin. Wonder how that worked out? The interviews with Charles Ellis and Christine Benz were outstanding.

BITCOIN BECAME 50% OF BILL MILLER’S NET WORTH LARGELY THROUGH GAINS FROM EARLY PURCHASES. NOW WHAT? – WealthTrack

Anybody recall Louis Rukeyser and "Wall Street Week" and the not-so-good predictions of his Elves?

Wall Street Week - Wikipedia

Of course, they audio record what is happening in your home. And, no, not just what questions have been asked of it. They're on all the time. Those crazy Alexa and Siri, etc. machines were likely developed for that purpose.

Even worse, most (or all) Smart TVs have cameras and are video recording the room they are in. They probably audio record too - not sure on that. My understanding is that you can disable the camera but, it has to be done at initial set-up when you buy it. If anyone knows more about that, please post details.

Yes, that is a bad situation when the US's 3rd largest trading partner - China - is also your 1st or 2nd military foe.

No worms or parasites feasted on the US.
US corporations gave away its technology and manufacturing to other countries in pursuit of cheaper costs, high returns, and great dividends for stock holders, and the country feasted on all the cheap goods.
US lost the workforce to manufacture those goods, and even if companies bring home their industries, it will take billions of $$$ and years to start up and produce.
All the now perceived problems were self induced by Corporate America.
At least many technology items are now tariff free, as the price hit was going to cost votes, and sales.
Someone seems to be blinking quite rapidly!

Still have the problems, the cause is irrelevant
 

I believe you are right about the cause, but the problems still exists. The cheap labor goods are crack, and we are going to go through painful withdrawals just like any addict would. It has to be done though, our deficit spending and debt need to be turned around now, otherwise the future is much shorter and we all die like the overdose victim.

OK, I just watched Consuelo Mack's interview with Robert Kessler. I agree with his viewpoint while bearing in mind he is a bond guy. Although he did not mention The Shiller Index he did refer to P/E ratios being very, very high. The Shiller Index closed Friday at 33.15, still about double its median and mean. He also mentioned that when stocks dive it usually is about 50%. It could be even more under present valuations IMHO. His offhand remarks about financials advisors caused me to chuckle as they were right on the mark.

Looks like he is about my age and enormously wealthy. Repo Man Robert Kessler used the repo market to help his clients earn 24% returns last year on Treasury bonds. What does he know that others don't? - September 15, 2003

newsflash - the US induced tariffs on chinese smart phones, computers, and other electronic devices have been lifted

Hey, manaboutown, thanks for watching that interview, for the conversation at-hand. I also got a laugh out of Kessler's remark about financial advisors.

Ironically, the first response to my original post was in favor of taking advice from only those truly in-the-know -- ya know, like a VP of ML??? HAH! BOA acquired ML, now known as just plain Merrill, because the giant bank wanted an advisory. BOA gets a piece of the Merrill action. BOA's first loyalty is to the stockholders and the Big Wheels.

When thinking about sources of information, it is always a good idea to read between the lines, look for the agenda. Those Merrill advisors are getting paid whether you do or not -- just not getting paid quite as much, but the money still rolls in from AUM, etc. And soooo, the stockholders still get paid, too. But if others feel like a huge bank is looking out for them, well, alrighty then. I am just not a fan of huge banks and their underling advisors.

Btw, I was trying to figure out how old Kessler is, but I was in a hurry this morning when I threw this conversation onto TOTV and did not have time to track down his age. His main point was about his age and how long it will take for these fevered promises to ever come true. We know somebody like Kessler is not going to go broke, but I thought his reasoning for abandoning the market was interesting.....

But, for some people, there will always be the thrill of the chase and/or there can never be enough money. A friend of mine grew up in her father's funeral business. She said her dad used to say, "There are no saddlebags on coffins." Kessler was basically saying to take the profit and run, once you reach an age where if things go really bad, you might not ever recover.

I liked the second interview for reasons I included in my original post.

Boomer

A tariff is a tax. That's it.

Buy low, sell high.

Kessler was 61 at the time according the 2003 article and worth hundreds of millions so I am guessing he is my age, 83, give or take. He looks ten years younger to me. He got into the bond business in 1966 or 1967 and commented during the interview on the Dow being 1,000 in I think 1969 and then again in I think 1981. I had a boss during the 1970s who was a stock market genius and I am not kidding. He kept encouraging me to get into the market which was very cheap during those years but I was fixated on investing in commercial real estate which worked out well. Nevertheless I put a few bucks in a couple of his recommendations and doubled that money within a very short time. He referred me to a discount broker, Olde Discount, too. He was about ten years older than me and starting with nothing he was already worth several million dollars at that time. He had gone to Stanford on a 100% scholarship, majored in chemistry.

EXCEPT——When that advisor is also a long time personal friend and pretty much does the same with his own money as he does with mine

Investing boils down to:

There are many ways to invest money, each has its advantages/disadvantages
The primary point is risk, which is about how easy it is to lose money
Risk is unique to each individual, and to each investment approach it changes over time and is difficult to quantity
Investing is counter intuitive:
selling high involves taxes unless in an IRA, and the relinquishment of the hope of more gains after gains (greed)
buying low involves waiting for sales prices, when everyone else is losing their money and minds
buying low requires overcoming hard wired human fear of more losses

The future is always uncertain, sometimes more uncertain than at other times.
There is always, always event risk, because humans are unpredictable and emotional.
The event may be one of company, industry, systemic banking, technological, political, geopolitical or natural
but these can seldom be predicted or prepared for in time, and will happen to everyone at some point in time given a long enough time.
And these event risks can happen to you as well, they are not limited to the market.

So you pay your entrance fee and take your chances, and if it doesn't work out, cut your losses quickly, if there is a fire, you want to panic early and be out first to avoid being trampled.

Simple concepts, most difficult game to play and maybe win ever invented.

Best advice I've seen on TOTV in a long time, despite all the "Experts" here....

Most people have a hard time listening even during a conversation. The “kitchen language” which takes place in most homes must be absolutely boring to an outsider.

The sole purpose of the USA tariff threat is to raise the USA tariff from a nominal 3% to 10% and force every other country to lower their tariffs to 20% maximum without penalties. They also want to stop currency manipulation but that will be difficult. From the tariff revenue (10% sales tax on USA citizens when purchasing foreign stuff) and reduced fraud/waste/government spending, they will be able to have a 15% flat income tax with a large standard deduction and get rid of tax "write-offs" that encourage political corruption.

This offshoring was forced deliberately starting 40 years (before NAFTA) to make the rest of the world wealthier and more peaceful...It worked great. Now is the time to stop the forced offshoring which is what is going on now with the tariff threats.

I listen to the vp at Merrill for my advice! Good luck with that. So I’m guessing he has you sitting pretty with no moves while your portfolio is down 20+%, and it’s still going down. But while you are losing wealth, the vp is still making his money, right?

Unless your vp told you to sell when your holdings were high, then he is no better than a kid on the street making a statement. Does your vp have the same credentials as Buffet? If he does, you would have a lot of cash on hand to make new stock purchases in the near future. I even know this, I sold everything last December and waiting to get back in.

If the vp told you to stay the course, in a couple of years you will be back to what you had at the start of 2025 unless you have to sell shares to live on during this downturn, then it will take longer to recover.

Market risk? IMO, you are at risk if you don’t know what you are doing financially and depend on a broker and assume you will make money in the long run. I have helped so many friends that were paying somebody to handle their investments that were not making them money, or very little money.

I sell high all the time, I can’t remember ever having a loss, maybe back in 2000, but until recently I never sold a share in a downturn until the end of 2021 and last December. Take the emotions out of selling, put a trailing stop loss on your stocks. I would happily pay a couple % in taxes if I’m making hundreds of thousands in gains, better than getting a $3000 write off every year on your taxes for losing money when selling.

Another risk is being too cautious in your investments that you never make money or very little after inflation. For example, I will never buy bonds, never have, you can’t make any money on them unless they are high risk. Annuities will never make you money in the long run and with their high fees, you’ve already lost money. There are hundreds of index funds that have very low risk, high returns, with decent dividends all with around .02-.05% fees. There were many stocks in 2023 and in 2024 that had multiple 100’s % gains and history will repeat itself in the coming months.

If you have a 401k or a pension, you are the evil corporation. Regulating foreign trade is a government responsibility. As usual, the mess we are currently trying to fix is a result of 50 years of terrible government trade and fiscal policy. The liberal accedemics who kept telling us trade deficits were a good thing are equally at fault. The question is, does America have the stomach to complete the reforms necessary to correct these 50 years of terrible government policy? With half the population in denial or brainwashed by propoganda, I doubt it.

Corporations are not evil! People aren’t evil if they have 401ks or pensions. If it wasn’t for corporations, we would not have the technology we have today. We all would be using pen and paper, mailing Kodak pics to relatives, and have horses and buggies.
People with pensions and especially 401ks, these people have the brains to invest and the brains to choose jobs that provide benefits, instead of someone that has to accept any job at a low wage with no benefits because they didn’t learn anything in school.

As for tariffs, it’s about time somebody did something about it. Just like countries not paying their fair share in nato. We are tired of supporting every other country but ours.

Tariffs have worked to bring trillions of dollars in investment for reindustrialization.
The rapid shifts in tariff levels represent deals being made.
Anyone looking for a safe haven should buy physical gold/silver.
Everything else has counterparty risk.

Just so wrong!
 

The American consumer put us in our current position by picking the cheapest price item over American made items. Levi Jean is a prime example… in the 80s the price of Levi’s was about 40 a pair, while imports were about 10. Consumer picked the cheapest price..
The US can’t compete with countries that pay their workers at 2 or 3 dollars an hour…. Americans will not work for these wages. These businesses are not coming back OR if they do the American consumer will have to pay much, much higher prices that more Americans can’t afford….
This it a World economic and to think we can just change things that is plan Stupid…. It will not happen… without pain for us and our families for many, many years….

We need to accept the World economy as it is…. The U S was and still is the strongest nation why rock the boat now…

++++ Just love those folks striking out at the serious work being done to rid out federal waste, fraud, abuse of OUR TAX DOLLARS. Yes - brainwashed, and paid to protest by the folks who despise our country. And the idiotic striking out at a major company and its customers.
Same with the serious work being done to FINALLY correct the USA trade policies worldwide.

This takes GUTS and strength and willingness to take short term heat. 95% of the countries are standing in line to make DEALS, all for the betterment of the USA and a good deal for both. China will be standing alone soon, odd man out. Just where we want them. I have tremendous faith that leveling the Trade playing field and hitting China economically.

As you said, the 'denial or brainwashed' folks will not/cannot see the facts. EVERYTHING being done, for the betterment of the USA and 95% world, is constantly berated.

You can disable the camera on the smart TV anytime you want by a small bit of electrician's tape.

American consumers have enjoyed the cheap prices of manufactured consumer goods for decades. They aren’t going to buy a $45 doll when they are use to buying the same doll from China for $19. There is no incentive for corporate America to move their plants back to the US. Americans won’t buy the $45 doll if they return, because we can’t compete in cheap raw materials and labor. Never will. US companies based in China, Thailand and elsewhere will continue to sell their $19 dolls through out the world where there are no tariffs. The US consumer will do without or pay the higher tariff price…or wait for a different President to be elected once consumers want prices to go down again and tariffs eliminated.

With a slight of hand, businesses figured out how to put a large portion of the debit side of their ledgers on the backs of US citizens and then convinced us we were getting a great deal with cheaper foreign products. Few noticed how the jobless affected our budgets at home with the jobs shipped overseas. As we pay out of our pockets for all the programs that support the loss of employment, subsidized housing/rent, Medicaid, food stamps, health insurance and all the social programs for the jobless not to mention the lack of dignity and loss of self esteem for those affected. We also lost the very important ability to care for ourselves in the event of world disagreements or worse. Yeah, we sure came out ahead, ahem.:loco:

remember when in school you were a good student, and then a subject came up which you didn't quite understand as quickly as others? homework was good, but tests didn't always get the same results? You felt confident and then the results didn't happen as expected?

Starting to happen alot these days . .

In this case in poker it's called a bluff, a large bet, and the opponent doesn't get intimidated, and you start to second guess the situation. . and then realize you miscalculated, and you have to fold. .

Folding happened with Russia, the outcome didn't match the expected test results
Folding in tariffs would appear more slowly. . and with lots more spin. .

ITs called folding after a bluff. . . because a view of the world isn't a winning view of how the world works for your position. . .

When you post a claim like this, including a link to a story about this would be helpful.

reuters.com

Get ready for massive corruption as companies grovel for tariff exemptions.

yes, debt needs to be turned around, but it will be made worse by the upcoming new tax percentages. The upper 1% will pay LESS and the middle and lower classes will pay MORE. It will also be easier for them to cheat now that there are fewer IRS agents. So. less money coming into the Government.

The way I see it - offshoring was done to get rid of US unions. This was accomplished. The unions that are left are small and weak. Mission accomplished - Make America Weak, Poor, and Without Unions. Tariff threats are causing the WORLD to view the US as UNSTABLE. Tariff threats are causing counties like Japan to take their MONEY out of US bonds and look to other counties as more RELIABLE TRADING partners. ........A Flat Income tax like flat sales taxes hurt the lowest end of the financial spectrum the MOST, as will tariffs which drive up prices for the consumer.

There is some GREAT advice in this post. I agree.....I NEVER buy bonds.

Right now, I think that the US is effectively out of NATO because right now I doubt that we would HONOR OUR commitment to fight for a NATO country that got attacked. And Europe and the UK now know that THEY have to provide their OWN security. Also, those counties and Australia and Japan will be VERY unwilling to share sensitive spy information with the US. We are becoming the THREAT to the rest of the world.

The way you "see if" is correct.
Tariffs will make America grovel again as the world trading lines are cut with both friends and enemies.
Forget "recession". Depression? Time will tell.
Have a nice day! 🙂

The American consumer was tricked by large American companies that moved off shore to avoid paying Americans and to avoid UNIONS that kept wages high. We made China STRONG and now a MONSTER which competes against the US militarily. And WHY ------to make a FEW, already rich American top 1% types richer that showed no loyalty or patriotism to America. .........If America had spent money to build US factories that used AI and robotics to manufacture products that would be cheaper than off shored products -----then we would NOT be in this MESS.

Any similarities to Germany pre-WWII? Asking for a friend.

Sorry, but I see the world completely differently.

Actually, I can agree with that. I would add that it is OBVIOUS that NOT 100% of all Americans are meant to be Silicon Valley millionaires or Wall St. stock brokers. 80% of Americans would be better off working in a blue collar situation with labor UNION protections. Germany works well where management and UNION workers do NOT fight each other, but work together for the benefit of their company and COUNTRY. The US problem goes back to the elimination of high school VOCATIONAL training. That was ELIMINATED to keep property taxes LOW for the rich people with large properties.........Blue collar work SHOULD BE respected.